REGINA – It’s a sign of tough times for some people, especially those who rely on the oil industry.
The number of Canadian who can’t pay their debts is on the rise and the effects of lower oil prices are beginning to show
“There’s no question that the number of fillings is increasing and will increase for some period of time,” said Ian Schofield, a bankruptcy trustee with MNP
According to MNP, 212 people in Saskatchewan filed bankruptcies or consumer proposals in March, which is 25 per cent higher than last year and the highest level in four years. Schofield said people are often slow to file and insolvency filings are expected to continue to rise
“My expectation is even if the economy turned around instantly, which I don’t actually expect to happen, that for a number of months, possibly a year, we would still see a higher level of activity because of that lag,” said Schofield.
READ MORE: Insolvency spikes in Sask.: CIBC report
The biggest demand for new credit is in the western provinces, where borrowing increased 5.2 per cent in the first quarter compared to last year. That’s nearly double the national average of 2.7 per cent.
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Falling oil prices are partly blamed for the spike. The downturn is predicted to lead to 12,000 direct or indirect jobs loses in Saskatchewan this year.
“Younger individuals that were in the oil field when they’re making a lot of money and then all of a sudden they’re not making anymore,” said Tanis Ell, a counsellor with the Credit Counselling Society. “When they’re making it, they’re spending it just as fast.”
As we become more dependent on credit, Ell said our financial literacy hasn’t kept pace.